Professional Documents
Culture Documents
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Product & service development
➢Original products-New brands that the firm develops through its own research
and development efforts
➢Product improvements
➢Product modifications
Sources of Information for New Product Development
Marketing
Marketing Research
Technology & Quality Sales
Scientists (Where applicable)
Engineers
Operations Managers
Manufacturing
Operations
Logistics
Procurement
Legal Affairs Supply Chain
Regulatory Compliance Quality Control
Cross functional product design
➢ Traditionally, individual functional areas (engineering, operations, marketing)
operate without consulting each other
➢ This is the sequential or ‘over the wall’ approach
Idea Generation
and Screening
Commercial
Launch & Concept
Product use development
and support
Testing,
Product Feasibility
evaluation and Analysis
improvement
Advance &
Production
Detailed
process design
engineering
and system
design
How does a new product get created?: Idea generation
Concept development
➢ Concept development is the process of evaluating your customers'
reactions to your product or service before your product development
➢ It is a structured way to develop an idea, see if customers like your idea, and
determine what customer market is willing to buy it
Concept development
➢ After exposing the concept to the group of target consumers, they will be
asked to answer questions in order to find out the consumer appeal and
customer value of each concept
➢ Suppose Wai Wai wants to expand its line of noodle products. The managers
conduct surveys from customers to determine which noodle items (flavor)
would appeal to customers from various flavor alternatives
Feasibility analysis
➢ Market Feasibility
➢ Future sales in terms of volume and value
➢ Future market share in terms of volume and value
➢ Financial Feasibility
➢ Future income statement
➢ Payback period
➢ ARR and IRR
➢ Production and Operation Feasibility
➢ Manufacturability
➢ Efficiency in operations
Advance and detailed engineering design
Advance & detailed engineering design
High
Degree of Labor
Low
O X
Low High
3-27
Misalignment due to lack of concurrent engineering
Quality Function Deployment
➢ Tool for concurrent design of products i.e. Used in cross functional teams
➢ Also known as “House of Quality”
➢ Developed in Japan in 1972
➢ Introduced in USA in the late 1980s
➢ Companies felt it increased customer satisfaction
➢ Helps in reducing the product development and product cost of the
organization
➢ E.g. Toyota was able to reduce the development cost by 60 % and
development time by 33 %.
Need to focus
QFD Target
QFD-definition
➢ A planning tool used to fulfill customer expectations
➢ A structured process for planning the design of a new product or service or
for redesigning an existing one.
➢ A tool used to translate customer requirements to engineering specifications
➢ It emphasizes thoroughly understanding what the customer wants or needs.
Then those customer wants are translated into characteristics of the product
or service.
Value analysis: Example
(a) The original design (b) Revised design (c) Final design
The whole product design process The whole service design process
Repeatable can be repeated as it follows the can not be repeated as it follows
standardized procedures. the flexible procedures.
Product design can be patented for Service design can not be patented
Patent
certain period of time. and it can be easily copied.
Why do we need to analyze the process?
➢ Service Blueprinting
Flow diagrams: Movement of materials and steps
Flow diagram of
burger order
taking process
Process
Sales order
Production
control Wait
Warehouse Wait
Transport Move
➢ The first step in value stream mapping is to create a current state map
➢ This map can help identify waste such as delays, restrictions, inefficiencies,
and excess inventories
➢ These are then eliminated in the ideal state map, which gives the
organization a working plan to achieve lean efficiency
Value stream mapping: flow chart + time frame + value
addition
Value stream mapping: Value and non value addition
Driver
Picks Deliver
On Stage Up Pkg. Package
Airport Fly to
Dispatch Unload Load
Driver
Receives Sort Fly to
& On
& Loads Center Destination Sort
Support Process Load on Truck
Airplane
Sort
Packages
Queues
We see queues every day in our life, whether it’s a line in government office, or
in the banks, queues of vehicles on the road, queues in petrol pumps, packets in
data networks, department shops line etc.
Queuing theory
➢ Queuing theory is the mathematical study of the movement of people,
objects, or information through a waiting line
➢ Queues can occur whenever resources are limited
➢ Some queuing is tolerable in any business since a total absence of a queue
would suggest a costly overcapacity or underutilization or the resources
Types of queue
➢ Single server single queue
➢ Multiple server multiple queue
➢ Multiple server single queue
➢ Single server multiple queue
Single server single queue
Multiple server multiple queue
Multiple server single queue
Single server multiple queue
Some queuing is tolerable in any business since a total absence of a queue
would suggest a costly overcapacity or underutilization of the resources
Types of cost in operating facility
➢ Serving cost (The cost of providing service to the customers which depends
on the number of servers)
➢ Serving cost= Number of servers * Server cost
➢ Waiting line cost (The cost related to not providing the service or customer
dissatisfaction due to frustration of waiting line, which happens due to low
number of servers)
➢ Total cost of operating facility (Serving cost + Waiting line cost)
Identify the given curve: Is it serving cost or
waiting line cost?
Identify the given curve: Is it serving cost or
waiting line cost?
The equilibrium point
Queuing theory: Serving cost, waiting line cost, equilibrium
point and total cost of operating facility
Elements of queuing system
➢ Queuing theory is a branch of mathematics that studies how lines form, how
they function, and what flaws are there in the line and suggest how they can
be rectified
➢ In queuing theory, the process being studied is broken down into four distinct
elements
➢ The arrival process and the size of the customer population (finite or infinite)
➢ The queue and queuing discipline (FIFO, LIFO etc.)
➢ The number of servers and the service process
➢ The departure process
Arrival process and the size of the customer
population
➢ The customer will arrive either from the finite or infinite population in the
queuing system
➢ The customer arrival will follow the Poisson distribution at a certain average
number per unit of time
The queue and the queuing discipline
➢ There will be queue and queuing discipline of either FIFO or LIFO will be
followed (In human queue, FIFO system will be strictly followed)
➢ The customers may show three types behavior while joining the queue or
during the queue itself
➢ Balking customers
➢ Jockeying customers
➢ Reneging customers
Balking customer
➢ The number of servers may depend on the capacity of the service provider
➢ The customer service will follow the exponential distribution at a certain
average number per unit of time
Application of queuing theory
➢ Queuing theory is a branch of operations research which is used to predict
➢ The average length of queue (Lq)
➢ The average length of queuing system(Ls)
➢ The average waiting time in the queue (Wq)
➢ The average waiting time in the queuing system (Ws)
➢ In order to decide the amount of resources required to provide any service
➢ The end result is a set of conclusions that aim to identify any flaws in the
system and more efficient and cost-effective workflow systems
Length of the queue
Length of the queue means the customers who are behind the customer who is
being served
Length of the queuing system
Length of the queuing system means the length of the queue plus the customer
who is being served
Waiting time in the queue
Waiting time in the queue means the average time the customer waits to get
served
Waiting time in the queuing system
Waiting time in the queuing system means the average time the customer waits
to get served plus average service time
Service rate is greater than arrival rate
Single server single queue infinite population model
➢ Though, there are various models of queuing theory, as per our syllabus we
will use single server single queue (infinite population model) to solve the
numerical
Assumptions of queuing theory
➢ The arrival rate of customers follows Poisson distribution i.e., arrival of
customers are independent and at constant rate
➢ The service rate of customers follows negative exponential distribution
➢ The service rate is greater than arrival rate (Initially lower but later in average
its higher)
➢ The FIFO queuing discipline will be strictly followed
➢ The calling population is infinite (The server assumes customers will come
from infinite population)
➢ There will be only one server
Notations used in queuing theory
➢ 𝜆 = Mean customer arrival rate or average number of customers’ arrival in
the queuing system per unit of time
1
➢ = Mean inter arrival time between customers (Average customer arrival
𝜆
time) or expected arrival rate
Notations used in queuing theory
➢ µ = Mean service rate or average number of customers completing service
per unit of time
1
➢ = Mean time taken to service a customer (Average service completion time)
µ
or expected rate of servicing
➢ Ls = Mean number of customers in the system/Length of the queuing system
➢ Lq = Mean number of customers in the queue/Length of the queue
➢ Ws = Mean waiting time in the system/queuing system
➢ Wq = Mean waiting time in the queue
Notations used in queuing theory
➢ 𝜌 𝑟ℎ𝑜 = Probability that the server is busy or probability of at least one
person in the system (Traffic intensity or server utilization factor)
➢ n = Number of customers in the system
➢ ϸ0 = Probability that the service facility is idle (Probability of zero customers
in the system)
➢ ϸn = Probability of n customers in the system
Equations used in queuing theory
1
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒 µ 𝜆
➢ 𝜌 𝑟ℎ𝑜 = 1 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑎𝑟𝑟𝑖𝑣𝑎𝑙 𝑡𝑖𝑚𝑒 µ
𝜆
➢ ϸ0 = 1-ρ(rho)
➢ ϸ1 (Probability of 1 customer in the system) = ρ1ϸ0
➢ ϸ2 (Probability of 2 customers in the system) = ρ2ϸ0
➢ ϸ3 (Probability of 3 customers in the system) = ρ3ϸ0
➢ ϸNo queue (Probability that there is no queue) = ϸ0 + ϸ1 (No one in system and
one in system)
➢ This is equal to probability that there is no customer in the system plus probability that
there is one customer in the system)
Equations used in queuing theory
➢ ϸ (≥1) (Probability that at least 1 customer in the system) = 1- ϸ0 = ρ
➢ ϸ (≥2) (Probability that at least 2 customers in the system) = 1- ϸ0 - ϸ1
➢ [Logic for this: ϸ (≥2) = ϸ2 + ϸ3 + ϸ4+ ………. ϸ∞ = 1 - ϸ0 - ϸ1] (ϸ2 + ϸ3 + ϸ4+ ……….
ϸ∞ =1)
𝜌
➢ 𝐿𝑠 =
1− 𝜌
➢ 𝐿𝑞 = 𝐿𝑠 − 𝜌
𝐿𝑠
➢ 𝑊𝑠 =
𝜆
𝐿𝑞
➢ 𝑊𝑞 =
𝜆
Queuing theory 1
1. Customers arrive at the first class ticket counter of a film hall at a rate of 12
per hour. There is one clerk serving the customer at a rate of 30 per hour.
Assuming the condition for the used single channel queuing model evaluate.
a. Probability that a counter is busy
b. Probability that there is no customer at the counter (remains idle)
c. The average time the counter remains busy every hour
d. The average idle time of the counter every time
e. Probability that a customer is being served and nobody is waiting/Probability
that there is 1 customer in the counter/system
f. Probability that there are 2 customers in the counter/system
g. Probability that there is no customer waiting to be served/Probability that there
is no queue
Queuing theory 2
2. A departmental store has a single cashier. During rush hours, customers
arrive at the rate of 20 customers per hour. The average number of customers
that can be processed by the cashier is 24 per hour. Assume that the conditions
for use of single channel queuing model apply. Calculate
a. Probability that the cashier is idle
b. Average number of customers in the queuing system
c. Average time a customer spends in the system
d. Average time a customer spends in the queue waiting for the service
Queuing theory 3
3. At a service station customers arrive in a Poisson distribution with an
average time of 5 minutes between arrivals. The service rate follows an
exponential pattern with average time taken to serve a client with 2
minutes. Assuming single channel model calculate:
a. Probability that a station is busy
b. Probability that there is no customer in the station
c. The average time the station remains busy every hour
d. The average idle time of the station every time
e. Probability that a customer is being served and nobody is waiting/Probability that there is 1
customer in the station/system
f. Probability that there are 2 customers in the system
g. Probability that there is no customer waiting to be served/Probability that there is no queue
h. The length of the waiting system/The average number of the customers in the waiting system
i. The length of the queue/The average number of the customers in the waiting queue
j. The average waiting time in the system
k. The average waiting time in the queue
Queuing theory 4
4. The data relating to dock shows that the average arrival rate of trucks is 2 per
hour. The average time to load a truck using 3 loaders is 20 minutes, so that
service rate is 3 per hour and assuming Poisson arrivals and exponential service
rate calculate:
a. Probability that a truck has to wait for service (Probability that a dock/server is busy)
b. Probability that a dock/server is idle
c. Probability that there is 1 truck in the system
d. Probability that there are 5 trucks in the system
e. Probability that there is no queue
f. Probability that there are at least 1 customer in the system
g. Probability that there are at least 2 customers in the system
h. Expected number of trucks in the system (Length of the system)
i. Expected number of trucks waiting to be served (Length of the queue)
j. Expected time that a truck waits in the system
k. Expected time that a truck waits in the line
Queuing theory 4
4. The data relating to dock shows that the average arrival rate of trucks is 2 per
hour. The average time to load a truck using 3 loaders is 20 minutes, so that
service rate is 3 per hour and assuming Poisson arrivals and exponential service
rate calculate:
a. Probability that a truck has to wait for service (Probability that a dock/server is busy)
b. Probability that a dock/server is idle
c. Probability that there is 1 truck in the system
d. Probability that there are 5 trucks in the system
e. Probability that there is no queue
f. Probability that there are at least 1 customer in the system
g. Probability that there are at least 2 customers in the system
h. Expected number of trucks in the system (Length of the system)
i. Expected number of trucks waiting to be served (Length of the queue)
j. Expected time that a truck waits in the system
k. Expected time that a truck waits in the line
Queuing theory 5
5. Customers come to a cinema counter at a rate of 30 per hour. The time taken
to issue has exponential distribution with a mean of 90 seconds. Find
a. Probability that a counter remains busy
b. The average time the counter remains busy every hour
c. Probability that a counter remains idle
d. The average idle time of the counter every time
e. Probability that there is 1 customer in the system
f. Probability that there are 3 customers in the system
g. Probability that there is no queue
h. Probability that there are at least 1 customer in the system
i. Probability that there are at least 3 customers in the system
j. Expected number of customers in the system (Length of the system)
k. Expected number of customers waiting to be served (Length of the queue)
l. Expected time that a customer waits in the system
m. Expected time that a customer waits in the line
Queuing theory 6
6. At a certain saloon, customers arrive in a Poisson distribution fashion with an
average time of 20 minutes between arrival. The interval between services at the
saloon follows exponential pattern and the mean time for the purpose comes to
15 minutes. Determine
a. The average length of the system in the saloon
b. The average length of the queue
c. The average time spent by a customer in the queue
d. The total time spent by a customer in the saloon
e. By how much should the flow of customers be increased to justify the employment of
another barber if the manager of the saloon is willing to do so, provided the customers
are to wait for 50 minutes for the service. (Use Wq =50 formula, calculate new λ and
subtract old lambda from new lambda and if necessary calculate percentage as well).